At the next election voters will be presented with three main choices - the Likud party on the right, the Labour party on the left, and Mr Sharon's new movement in the centre, our correspondent says.

Mr Sharon listed peace with the Palestinians and Israeli security as among the main goals of his party, tentatively called National Responsibility.

The prime minister is said to have the backing of 14 of Likud's 40 MPs, including five cabinet ministers.

Getting 14 legislators together would give him the right to claim a share of Likud party funding.

The Knesset has 120 seats.

Mr Sharon upset many hardliners within Likud over his disengagement plan, carried out earlier this year, under which Israel unilaterally withdrew its settlers and soldiers from the Gaza Strip and parts of the West Bank.

On Monday night he said there was no plan for further unilateral disengagement from the West Bank.

"We have the big settlement blocs that will remain forever in the hands of Israel and will be territorially connected to Israel," he said.

"There is no additional disengagement plan - there is the roadmap," he said, referring to the US-backed peace plan.

After Sharon

Uzi Landau, a senior Likud figure opposed to the Gaza withdrawal, said his party would "do whatever possible" to fight any further pullout.

He said Mr Sharon's departure represented a "new hope for Likud with clean politics".